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General Electric

Street entrance to GE Headquarters in Fairfield, Connecticut

General Electric Company (), or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States.[1][2] The company operates through four segments: Energy, Technology Infrastructure, Capital Finance and Consumer & Industrial.[3][4]

In 2011, Fortune ranked GE the 6th largest firm in the U.S.,[5] as well as the 14th most profitable.[6] Other rankings for 2011/2012 include #7 company for leaders (Fortune), #5 best global brand (Interbrand), #63 green company (Newsweek), #15 most admired company (Fortune), and #19 most innovative company (Fast Company).[7]

Contents


History

Formation

By 1890, Thomas Alva Edison had brought together several of his business interests under one corporation to form Edison General Electric. At about the same time, Thomson-Houston Electric Company, under the leadership of Charles Coffin, gained access to a number of key patents through the acquisition of a number of competitors. Subsequently, General Electric was formed by the 1892 merger of Edison General Electric of Schenectady, New York and Thomson-Houston Electric Company of Lynn, Massachusetts and both plants remain in operation under the GE banner to this day.[8] The company was incorporated in New York, with the Schenectady plant as headquarters for many years thereafter. Around the same time, General Electric's Canadian counterpart, Canadian General Electric, was formed.

Public company

In 1896, General Electric was one of the original 12 companies listed on the newly formed Dow Jones Industrial Average and still remains after years, the only one remaining on the Dow index. General Electric has however not been on the DOW continuously [9].

23 Ton diesel electric locomotive made at the General Electric Corp. plant in Schenectady, New York
23 Ton diesel electric locomotive made at the General Electric Corp. plant in Schenectady, New York
In 1911 the National Electric Lamp Association (NELA) was absorbed into General Electric's existing lighting business. GE then established its lighting division headquarters at Nela Park in East Cleveland, Ohio. Nela Park is still the headquarters for GE's lighting business.

RCA

The Radio Corporation of America (RCA) was founded by GE in 1919 to further international radio. GE used RCA as its retail arm for radio sales from 1919, when GE began production, until separation in 1930.[10] RCA would quickly grow into an industrial giant of its own.

Power generation

GE's long history of working with turbines in the power-generation field gave them the engineering know-how to move into the new field of aircraft turbosuperchargers. Led by Sanford Alexander Moss, GE introduced the first superchargers during World War I, and continued to develop them during the Interwar period. Superchargers became indispensable in the years immediately prior to World War II, and GE was the world leader in exhaust-driven supercharging when the war started. This experience, in turn, made GE a natural selection to develop the Whittle W.1 jet engine that was demonstrated in the United States in 1941. Although their early work with Whittle's designs was later handed to Allison Engine Company, GE Aviation emerged as one of the world's largest engine manufacturers, second only to the well-founded and older British company, Rolls-Royce plc, which led the way in the design and manufacture of innovative, reliable, efficient, high-performance, heavy-duty jet engines.

In 2002, GE acquired the windpower assets of Enron during its bankruptcy proceedings.[11] Enron Wind was the only surviving U.S. manufacturer of large wind turbines at the time, and GE increased engineering and supplies for the Wind Division and doubled the annual sales to $1.2 billion in 2003.[12] It acquired ScanWind in 2009.[13]

Some consumers boycotted GE light bulbs, refrigerators and other products in the 1980s and 1990s to protest GE s role in nuclear weapons production.[14]

Computing

GE was one of the eight major computer companies during the 1960s  with IBM, the largest, called "Snow White" followed by the "Seven Dwarfs": Burroughs, NCR, Control Data Corporation, Honeywell, RCA, UNIVAC and GE.

GE had an extensive line of general purpose and special purpose computers. Among them were the GE 200, GE 400, and GE 600 series general purpose computers, the GE 4010, GE 4020, and GE 4060 real time process control computers, the Datanet 30 and Datanet 355 message switching computers (Datanet 30 and 355 were also used as front end processors for GE mainframe computers). A Datanet 500 computer was designed, but never sold.

In 1962, GE started developing its GECOS (later renamed GCOS) operating system, originally for batch processing, but later extended to timesharing and transaction processing. Versions of GCOS are still in use today.

In 1964 1969, GE and Bell Laboratories (which soon dropped out) joined with MIT to develop the pioneering and influential Multics operating system on the GE 645 mainframe computer. The project took longer than expected and was not a major commercial success, but it demonstrated important concepts such as single level store, dynamic linking, hierarchical file system, and ring-oriented security. Active development of Multics continued until 1985.

It has been said that GE got into computer manufacturing because in the 1950s they were the largest user of computers outside of the United States federal government. However, in 1970, GE sold its computer division to Honeywell, exiting the computer manufacturing industry, though it retained its timesharing operations for some years afterwards. GE was a major provider of computer timesharing services, through General Electric Information Services (GEIS, now GXS), offering online computing services that included GEnie.

Acquisitions

For a complete list of acquisitions and divestitures, see General Electric timeline

In 1986 GE reacquired RCA, primarily for the NBC television network (also parent of Telemundo Communications Group). The remainder was sold to various companies, including Bertelsmann (Bertelsmann acquired RCA Records) and Thomson SA which traces its roots to Thomson-Houston, one of the original components of GE.

Also in 1986, Kidder, Peabody & Co. a U.S.-based securities firm was sold to GE and following heavy losses was subsequently sold to PaineWebber in 1994.[15]

In 2002 Francisco Partners and Norwest Venture Partners acquired a division of GE called GE Information Systems (GEIS). The new company, named GXS, is based in Gaithersburg, Maryland. GXS is a leading provider of B2B e-Commerce solutions. GE maintains a minority ownership position in GXS.

Also in 2002, GE bought wind turbine manufacturing assets of Enron Wind after the Enron scandals.[16]

In 2004 GE bought 80% of Universal Pictures from Vivendi. Vivendi bought 20% of NBC forming the company NBCUniversal. GE then owned 80% of NBC Universal and Vivendi owned 20%. As of January 28, 2011 GE owns 49% and Comcast 51%.

In 2004 GE completed the spin-off of most of its mortgage and life insurance assets into an independent company, Genworth Financial, based in Richmond, Virginia.

Genpact formerly known as GE Capital International Services (GECIS) was established by GE in late 1997 as its captive India based BPO. GE sold 60% stake in Genpact to General Atlantic and Oak Hill Capital Partners in 2005 and hived off Genpact into an independent business. GE is still a major client to Genpact getting its services in customer service, finance, information technology and analytics.

GE Plastics was sold in 2007 to SABIC.

In May 2007, GE acquired Smiths Aerospace for $4.8 billion.

In May 2008, GE announced it was exploring options for divesting the bulk of its Consumer and Industrial business.

General Electric's Schenectady, New York facilities (including GE's original headquarters) are assigned the ZIP code 12345. (All Schenectady ZIP codes begin with 123, but no others begin with 1234.)

On December 3, 2009, it was announced that NBCUniversal will become a joint venture between GE and cable television operator Comcast. The cable giant will hold a controlling interest in the company, while GE retains a 49% stake and will buy out shares currently owned by Vivendi.[17]

Vivendi will sell its 20% stake in NBCUniversal to GE for US$5.8 billion. Vivendi will sell 7.66% of NBCUniversal to GE for US$2 billion if the GE/Comcast deal is not completed by September 2010 and then sell the remaining 12.34% stake of NBCUniversal to GE for US$3.8 billion when the deal is completed or to the public via an IPO if the deal is not completed.[18][19]

On March 1, 2010, General Electric (GE) announced that the company is planning to sell its 20.85% stake in Turkey-based Garanti Bank.[20]

In August 2010, GE Healthcare signed a strategic partnership to bring cardiovascular Computed Tomography (CT) technology from start-up Arineta Ltd. of Israel to the hospital market.[21]

In October 2010, General Electric acquired gas engines manufacture Dresser Inc. for a $3 billion deal and also bought a $1.6 billion portfolio of retail credit cards from Citigroup Inc. This is the first major deal since the start of the financial crisis.[22]

On October 14, 2010, GE announced acquisition of data migration & SCADA simulation specialists Opal Software.[23]

December 2010: For the second times of this year (after Dresser acquisition), General Electric Co. buy oil sector company British Wellstream Holding Plc. an oil drilling pipe maker for 800 million pounds ($1.3 billion).[24]

February 2011: The company has agreed to buy the well-support division of John Wood Group Plc for about $2.8 billion. It is another aggressive moves recently of GE Oil & Gas made GE's acquisition was the largest of oil-service unit world wide in 2010.[25]

March 2011: GE announced it has completed the acquisition of privately-held Lineage Power Holdings, Inc., from The Gores Group, LLC. [26]

GE Capital sold its $2 billion dollar Mexican assets to Santander for $162 million and exit the business in Mexico. Santander will additionally assume the portfolio debts of GE Capital in the country. The transaction will be finished at first half of 2011. GE Capital will focus in the core business and will shed its non-core assets.[27]

Corporate affairs

Classic GE neon sign
Classic GE neon sign
GE is a multinational conglomerate headquartered in Fairfield, Connecticut. Its New York main offices are located at 30 Rockefeller Plaza in Rockefeller Center, known as the GE Building for the prominent GE logo on the roof. NBC's headquarters and main studios are also located in the building. Through its RCA subsidiary, it has been associated with the Center since its construction in the 1930s.

The company describes itself as composed of a number of primary business units or "businesses." Each unit is itself a vast enterprise, many of which would, even as a standalone company, rank in the Fortune 500. The list of GE businesses varies over time as the result of acquisitions, divestitures and reorganizations. GE's tax return is the largest return filed in the United States; the 2005 return was approximately 24,000 pages when printed out, and 237 megabytes when submitted electronically.[28] The company also "spends more on U.S. lobbying than any other company."[29]

In 2005 GE launched its "Ecomagination" initiative in an attempt to position itself as a "green" company. GE is currently one of the biggest players in the wind power industry, and it is also developing new environment-friendly products such as hybrid locomotives, desalination and water reuse solutions, and photovoltaic cells. The company "plans to build the largest solar-panel-making factory in the U.S.,"[29] and has set goals for its subsidiaries to lower their greenhouse gas emissions.[30]

On May 21, 2007, GE announced it would sell its GE Plastics division to petrochemicals manufacturer SABIC for net proceeds of $11.6 billion. The transaction took place on August 31, 2007, and the company name changed to SABIC Innovative Plastics, with Brian Gladden as CEO.

[31]

CEO

Jeffrey Immelt is the current chairman of the board and chief executive officer of GE. He was selected by GE's Board of Directors in 2000 to replace John Francis Welch Jr. (Jack Welch) following his retirement. Previously, Immelt had headed GE's Medical Systems division (now GE Healthcare) as its President and CEO.

His tenure as the Chairman and CEO started at a time of crisis  he took over the role on September 7, 2001[32] four days before the terrorist attacks on the United States, which killed two employees and cost GE's insurance business $600 million  as well as having a direct effect on the company's Aircraft Engines sector. Immelt has also been selected as one of President Obama's financial advisors concerning the economic rescue plan.

Businesses

GE's divisions include GE Capital, GE Energy, GE Technology Infrastructure, and GE Home & Business Solutions

Through these businesses, GE participates in a wide variety of markets including the generation, transmission and distribution of electricity (e.g. nuclear, gas and solar), lighting, industrial automation, medical imaging equipment, motors, railway locomotives, aircraft jet engines, and aviation services. It co-owns NBCUniversal with Comcast. Through GE Commercial Finance, GE Consumer Finance, GE Equipment Services, and GE Insurance it offers a range of financial services as well. It has a presence in over 100 countries.

GE gauges to control a railway locomotive at a museum near Saskatoon, Canada<!-- cite web -->
GE gauges to control a railway locomotive at a museum near Saskatoon, Canada[33]
GE also produces General Imaging digital cameras.[34] In 2010, General Imaging released the Bridge Camera GE X5 with 14MP and 15x optical zoom.[35] In 2011, it is replaced by 16MP GE X500 with optional red color in Japan besides traditional black or white color in world wide.[36]

Since over half of GE's revenue is derived from financial services, it is arguably a financial company with a manufacturing arm. It is also one of the largest lenders in countries other than the United States, such as Japan. Even though the first wave of conglomerates (such as ITT Corporation, Ling-Temco-Vought, Tenneco, etc.) fell by the wayside by the mid-1980s, in the late 1990s, another wave (consisting of Westinghouse, Tyco, and others) tried and failed to emulate GE's success.

It was announced on May 4, 2008 that GE would auction off its appliances business for an expected sale of $5 8 billion.[37] However, this plan fell through as a result of the recession.

Corporate recognition and rankings

In 2011, Fortune ranked GE the 6th largest firm in the U.S.,[5] as well as the 14th most profitable.[6] Other rankings for 2011/2012 include the following:[7]

  • #7 company for leaders (Fortune)
  • #5 best global brand (Interbrand)
  • #82 green company (Newsweek)
  • #15 most admired company (Fortune)
  • #19 most innovative company (Fast Company).

For 2010, GE's brand was valued at $42.8 billion.[38] CEO Jeffrey Immelt had a set of changes in the presentation of the brand commissioned in 2004, after he took the reins as chairman, to unify the diversified businesses of GE. The changes included a new corporate color palette, small modifications to the GE logo, a new customized font (GE Inspira), and a new slogan, "imagination at work" replacing the longtime slogan "we bring good things to life", composed by David Lucas. The standard requires many headlines to be lowercased and adds visual "white space" to documents and advertising to promote an open and approachable company. The changes were designed by Wolff Olins and are used extensively on GE's marketing, literature and website.

Recent controversies

The six reactors in the 2011 Fukushima I Nuclear Power Plant catastrophe had been designed by General Electric, the design of which had been criticised as far back as 1972.[39]

In March 2011, The New York Times reported that, despite earning $14.2 billion in worldwide profits, including more than $5 billion from U.S. operations, General Electric did not owe taxes in 2010. General Electric had a tax benefit of $3.2 billion. This same article also pointed out that GE has reduced its American workforce by one fifth since 2002.[40]

In December 2011, the non-partisan organization Public Campaign criticized General Electric for spending $84.35 million on lobbying and not paying any taxes during 2008-2010, instead getting $4.7 billion in tax rebates, despite making a profit of $10.4 billion, laying off 4,168 workers since 2008, and increasing executive pay by 27% to $75.9 million in 2010 for the top 5 executives.[41]

Environmental record

Pollution

GE has a history of some of its activities giving rise to large-scale air and water pollution. Based on year 2000 data,[42] researchers at the Political Economy Research Institute listed the corporation as the fourth-largest corporate producer of air pollution in the United States, with more than 4.4 million pounds per year (2,000 tons) of toxic chemicals released into the air.[43] GE has also been implicated in the creation of toxic waste. According to EPA documents, only the United States Government, Honeywell, and Chevron Corporation are responsible for producing more Superfund toxic waste sites.[44]

In 1983, New York State Attorney General Robert Abrams filed suit in the United States District Court for the Northern District of New York to compel GE to pay for the cleanup of what was claimed to be more than 100,000 tons of chemicals dumped (legally, at the time) from their plant in Waterford, New York.[45] In 1999, the company agreed to pay a $250 million settlement in connection with claims it polluted the Housatonic River (Pittsfield, Massachusetts) and other sites with polychlorinated biphenyls (PCBs) and other hazardous substances.[46]

From approximately 1947 to 1977, GE discharged as much as 1.3 million pounds of PCBs from its capacitor manufacturing plants at the Hudson Falls and Fort Edward upstate New York facilities into the Hudson River.[47] GE fought a media and political battle to avoid cleaning up the river and countered that dredging the river would actually stir up PCBs.[48] In 2002, GE was ordered to clean up a stretch of the Hudson River it had contaminated.[49]

In 2003, acting on concerns that the plan proposed by GE did not "provide for adequate protection of public health and the environment," the United States Environmental Protection Agency issued a unilateral administrative order for the company to "address cleanup at the GE site" in Rome, Georgia, also contaminated with PCBs.[50]

The nuclear reactors involved in the 2011 crisis at Fukushima I in Japan are GE designs,[51] and the architectural designs were done by Ebasco,[52] formerly owned by GE. Concerns over the design and safety of these reactors were raised as early as 1975.[53]

Environmental initiatives

On June 6, 2011, GE announced that it has licensed solar thermal technology from California-based eSolar for use in power plants that use both solar and natural gas.[54]

On May 26, 2011, GE unveiled its EV Solar Carport, a carport that incorporates solar panels on its roof, with electric vehicle charging stations under its cover.[55]

In May 2005 GE announced the launch of a program called "Ecomagination," intended, in the words of CEO Jeff Immelt "to develop tomorrow's solutions such as solar energy, hybrid locomotives, fuel cells, lower-emission aircraft engines, lighter and stronger durable materials, efficient lighting, and water purification technology .[56] The announcement prompted an op-ed piece in The New York Times to observe that, "while General Electric's increased emphasis on clean technology will probably result in improved products and benefit its bottom line, Mr. Immelt's credibility as a spokesman on national environmental policy is fatally flawed because of his company's intransigence in cleaning up its own toxic legacy."[57]

GE has said that it will invest $1.4 billion in clean technology research and development in 2008 as part of its Ecomagination initiative. As of October 2008, the scheme had resulted in 70 green products being brought to market, ranging from halogen lamps to biogas engines. In 2007, GE raised the annual revenue target for its Ecomagination initiative from $20 billion in 2010 to $25 billion following positive market response to its new product lines.[58] In 2010, GE continued to raise its investment by adding $10 billion into Ecomagination over the next five years.[59]

GE (General Electric) Energy's renewable energy business has expanded greatly, to keep up with growing U.S. and global demand for clean energy. Since entering the renewable energy industry in 2002, GE has invested more than $850 million in renewable energy technology. In August 2008 it acquired Kelman Ltd,[60] a Northern Ireland company specializing in advanced monitoring and diagnostics technologies for transformers used in renewable energy generation, and announced an expansion of its business in Northern Ireland in May 2010.[61] In 2009, GE's renewable energy initiatives, which include solar power, wind power and GE Jenbacher gas engines using renewable and non-renewable methane-based gases,[62] employ more than 4,900 people globally and have created more than 10,000 supporting jobs.[63]

GE Energy and Orion New Zealand Limited (Orion) have announced implementation of the first phase of a GE network management system to help improve power reliability for customers. GE's ENMAC Distribution Management System is the foundation of Orion's initiative. The system of smart grid technologies will significantly improve the network company's ability to manage big network emergencies and help it to restore power faster when outages occur.

GE unveiled a 40W replacement Energy Smart LED bulb, to be available late 2010 or early 2011. The company claims that the new LED bulb will provide a 77% energy savings and produce nearly the same light output as a 40W incandescent bulb, while lasting more than 25 times as long.[64]

Educational initiatives

GE Healthcare is collaborating with The Wayne State University School of Medicine and the Medical University of South Carolina to offer an integrated radiology curriculum during their respective MD Programs led by investigators of the Advanced Diagnostic Ultrasound in Microgravity study.[65] GE has donated over one million dollars of Logiq E Ultrasound equipment to these two institutions.[66]

Legal issues

On August 4, 2009 the SEC fined General Electric $50 million for breaking accounting rules in two separate cases, misleading investors into believing GE would meet or beat earnings expectations.[67]

GE has faced criminal action regarding its defense related operations. GE was convicted in 1990 of defrauding the US Department of Defense, and again in 1992 on charges of corrupt practices in the sale of jet engines to Israel.[68]

Notable appearances in media

GE was the focus of a 1991 short subject Academy Award-winning documentary, Deadly Deception: General Electric, Nuclear Weapons, and Our Environment,[69] that juxtaposed GE's "We Bring Good Things To Life" commercials with the true stories of workers and neighbors whose lives have been affected by the company's activities involving nuclear weapons.[70]

In the early 1950s Kurt Vonnegut was a writer for General Electric. A number of his novels and stories (notably Cat's Cradle) refer to the fictional city of Ilium, which appears to be loosely based on Schenectady, New York. The Ilium Works is the setting for the short story "Deer in the Works".

The NBC sitcom 30 Rock is set at the NBC Studios in the GE Building at 30 Rockefeller Center (hence the title). All characters in the main cast are NBC (and therefore GE) employees, and one character, Jack Donaghy (Alec Baldwin) is portrayed as having risen through the ranks of GE management to become Vice President of NBC's East Coast operations through the company's microwave oven division.

See also

  • Edison Engineering Development Program
  • GE Aviation
  • GE Building
  • GE Capital Finance
  • GE Energy
  • GE Home & Business Solutions
  • GE Global Research
  • GE Technology Infrastructure
  • Knolls Atomic Power Laboratory, Schenectady, NY
  • List of assets owned by General Electric
  • Phoebus cartel
  • Top 100 US Federal Contractors

References

Further reading

  • Carlson, W. Bernard. Innovation as a Social Process: Elihu Thomson and the Rise of General Electric, 1870 1900 (Cambridge: Cambridge University Press, 1991).
  • Woodbury, David O. Elihu Thomson, Beloved Scientist (Boston: Museum of Science, 1944)
  • Haney, John L. The Elihu Thomson Collection American Philosophical Society Yearbook 1944.
  • Hammond, John W. Men and Volts: The Story of General Electric, published 1941, 436 pages.
  • Mill, John M. Men and Volts at War: The Story of General Electric in World War II, published 1947.

External links

Video clips

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